Milk might hit $8 a gallon, absent federal action

Consumers soon could be defying the adage of not crying over spilled milk.

If Congress doesn't pass a new farm bill or extend the one in place by Monday, the price of a gallon of milk in grocery stores could go as high as $8, U.S. Sen. Bob Casey Jr. said Friday during a media conference call.

Earlier this month, U.S. Secretary of Agriculture Tom Vilsack said lack of action would mean milk prices would be based on permanent law enacted in 1949.

The department would be forced to provide substantial financial support to dairy farmers based on their production costs and start buying up surplus milk, he said.

That would trigger higher prices in grocery stores, cause consumers to buy less and create even more surplus, Casey said.

According to one estimate, the government could spend as much as $12 billion to $15 billion of taxpayer money on a product that could end up being poured out, he said.

That could be stopped if the House would take action as the Senate did months ago, when it passed a new farm bill, Casey said.

Some milk producers have said the consequences of reverting to the old law won't be as dire as predicted.

However, state officials and local industry representatives agreed with Casey's assertion that Congress needs to deal with the farm bill before the end of the year.

"We could debate on the impact on producers and the industry, but I'm focusing mostly on folks buying milk every day and trying to make ends meet in a difficult economy," Casey said.

In a follow-up email, Casey stated that the price hike would kick in gradually over a number of months.

Vilsack acknowledged that there would be a time lag before consumers would see prices rise because the department would need time to comply with the requirements of the old law.

"Let me be very clear about this," he said. "The best possible outcome would be for Congress to do its job and pass a five-year bill. The worst possible outcome would be for us to see Congress do nothing and permanent law to go into effect."